Wednesday, January 29, 2014

Politicians Playing Special Interests and Visa Versa

President Obama gave his State of the Union speech today (I didn't watch it but saw lots of tweets about it).

Politicians attempt to use speeches to show as many special interests as they can that they politicians cares about them and will help them.

Special interest professionals know what matters is results, not talk. Getting results from politicians is much harder.

Certain special interests care about mentions because they use those mentions as political pressure. If you don't mention NRA issues they will take action. If you mention your support of the NRA they then hold you to that in every word on every piece of legislation they seek to bend to their special interest. They are extremely effective at getting politicians to do what they want.

If you are a special interest you would love to have the same power the NRA (National Rifle Association) does to dictate to politicians the wording of bills and regulations and political appointments and demands to be publicly recognized.

Many special interests are much better at getting public support from politicians but don't get results. This is a sign of a weak lobby. These are often less well off groups - poor kids, for example. But the NRA, while it has developed lots a rich infrastructure for cash really has not natural leaning toward having lots of cash to but political action (they really were an effective special interest lobby that realized they needed cash and then built that aspect of their organization).

There are also special interests that don't care what politicians say, they care about results. This is normally an interest that knows they have no political leg to stand on, they just want cash to buy what they need in the back rooms. They are perfectly happy for politicians to say all sorts of stuff about how they are against too-big-too-fail banks for example as long as they pass legislation, write regulation and appoint regulators that all advance all the interests too-big-too-fail banks want. Other example of this type of special interest is trust fund babies, hedge fund "managers" (or non-managers) that get ludicrous tax advantages... Those knowing there is no rational or political support for the benefits their special interest takes they are perfectly happy for politicians to feign dislike of the benefits the government heaps on them as long as the government keeps piling on the cash to their special interest.

You can see what type of special interest is involved based on whether politicians get away with just meaningless mentions (poor kids, small business, education, punishment of crime [strong words required, safer communities not required], environment), wether there is a some combination of mentions and delivering that is required (farmers - must use words about family farmers but instead of crafting legislation that protects them without heaping benefits on corporate farming they mainly give lip service to family farms and gear benefits to reward factory farms), wether the politicians have to say the words the special interests demand (unions, different sides of abortion/choice), wether the politicians have to do what the special interests demand (too big to fail banks, big business - often with words about small business and policies suited to big business pushed by the likes of the Chamber of Commerce) or whether the politicians have to say the words and do what the special interests demand (NRA, copyright cartel).

Most special interests fall into the the first group - they get words and some token action (usually whatever doesn't interfere in any significant way with a special interest that actual has power). But most of the lobbying that matters, that takes hundreds of billions of dollars a year and redistributes it to specific special interests (or provides non-monetary rewards) and that is where special interest politics really matters. That is where we lose and special interests gain.

And occasionally that is where we will and special interests win against other special interests (but that is rare). An example is when the special interest in support of air bags finally pushed through rules to require them against the objections of car manufacturers. This has been a big benefit to society. But those types of special interest wins that happen to aid society are not the norm.

One of the structural weaknesses is benefits to special interests are often large (for manipulating the system in their favor) the costs to society are often large but spread out in such a way it isn't very painful for most people. So the special interest can pay or cajole politicians to give them a benefit that helps them a lot (they can pay the politician a portion of their benefit and still have a huge gain) while society loses no one loses enough to care enough to try and pay or cajole politicians to save society from a big loss.

When two (and really it will often been numerous) special interests are facing off on issues the loss to society is often limited (because those facing losses are going to be pained enough that it is worth their will to object to sweetheart deals to other special interests). Sometimes these conflicting issues are actually resolved fairly sensible as you have competing interests fighting to limit damage (while it might be possible for the groups to figure out how to have them share a big gain at the expense of society this often isn't so easy - the reason this issue ended up in this pile is that the costs were concentrated in a way that a special interest was motivated to protect itself).

Sadly there is little evidence politicians in the USA today play a role that would be natural/good: seeking to optimize the benefits to the society by listening to special interests and having as their primary mission benefiting the county. Instead they seek to maximize the cash they are given, the cash they and their staffs will be given (jobs and speaking engagements) and perks (private plane trips to exotic vacation sports with some transparent excuse to claim as legitimate, seats in the luxury box at sporting events, etc.). And they also seek not angering any special interest that has power enough (cash and/or political influence) in their constituency to throw them out of office.

Related: Fed Continues Wall Street Welfare - Estate Tax Repeal (basically a kickback to the 1% for cash payments to politicians) - General Air Travel Taxes Subsidizing Private Plane Airports

Update, this article posted the day after I made this blog post provides an example of what good lobbyists get you versus nearly no lobbyists (the poor), food stamps for the poor cut, subsidies to famers increased (as usually they hide to the maximum extent they can how large the benefits to rich (often absent "farmers") farmers and corporate farms. Congress axes $8.6bn from food stamps in farm bill adds $5.7bn government handouts to farmers

The cuts to federal food stamps come on top of a $5bn cut in November and will reduce payments to 1.7 million of the poorest Americans by an estimated $90 a month.

Republicans had sought even higher cuts but a two-year tussle with Democrats was brought to an end after a compromise was agreed that also included increasing a cap for the maximum subsidy payments that can be awarded to individual farmers from $50,000 to $125,000.

The measures will also add $5.7bn to the cost of a 50% subsidy on premiums for crop insurance and extend a loophole allowing multiple people to claim government subsidies for one farm.

Though helping many poorer farmers too, critics of the bill claimed it disproportionately benefited those with large farms, including several dozen unnamed landowners who are thought to receive more than $1m a year in total support.

No comments: